Cabinet next week must set up
Royal Commission of Inquiry into RM1.8 billion Tajuddin-MAS bailout, RM30
billion Bank Negara forex losses and other mega financial scandals in the
past two decades to establish transparency, accountability, integrity and
good governance of Abdullah premiership

(Parliament,
Thursday) The Cabinet next week must set up
a Royal Commission of Inquiry to conduct public investigations into the
RM1.8 billion Tajuddin-MAS bailout, RM30 billion Bank Negara forex losses
and other mega financial scandals in the past two decades to establish the
transparency, accountability, integrity and good governance of Abdullah
premiership.

The RM13.46 billion counter-suit
by one-time corporate high-flyer Tan Sri Tajudin Ramli filed on June 29 in
response to the RM589 million Danaharta suit has opened a “can of worms”
when it dropped a “bombshell” with shocking revelations surrounding the
Tajudin’s acquisition of 32% stake in MAS in 1994 and the RM1.8 billion
sell-back of the MAS shares to the government in 2000 at RM8 per share when
the market price was only RM3.68 or a premium of RM4.32 or 117 per cent.

The Sun scored a scoop
today with its report, “Tajudin
bombshell – ‘Mahathir and Daim directed me to buy MAS
shares’”, which answered many
questions which had been asked in and out of Parliament for the past decade
about the Tajudin MAS buy-out and sell-back –
without getting any light.

As the Sun
reported on its front page, the “bombshell” dropped by Tajudin Ramli’s RM13.46
billion counter-suit came from his various claims, viz:

·He was directed by former
prime minister Tun Dr. Mahathir Mohamad and former finance minister Tun Daim
Zainuddin to buy shares in MAS to help Bank Negara
recover from foreign exchange losses in 1994.

·The transaction was a
national service but was disguised as an arm’s length commercial deal
because the government wanted it that way to appease the investment
community and the public.

·He was at all times only a
nominee/agent of the government in MAS.

·He was assured repeatedly
by Mahathir and Daim that he would not suffer any losses or be held liable
for anything arising from his purchase of the MAS
shares.

·He was asked to keep this
special arrangement a secret. He is telling all now because the government
did not honour the agreement.

Regardless of
the outcome of the litigation between Tajudin and Danaharta and the
government, Tajudin’s revelations involve fundamental governance questions
and public interest issues which demand immediate and satisfactory response
from the present administration, as it will directly reflect on its
commitments on accountability, transparency, integrity and good governance.

The Tajudin
litigation has raised afresh many good governance and public interest
questions which cannot continue to be avoided if the Abdullah premiership is
not to be tarred with the brush of colluding and conniving in their
cover-up.

The first
question is whether Parliament and nation had been taken for a ride for a
decade by the former Prime Minister, Tun Dr. Mahathir Mohamad and former
Finance Minister, Tun Daim Zainuddin on the billion-ringgit Tajudin MAS
buy-out and sell-back scandals?

In retrospect,
Daim had committed parliamentary contempt when he deliberately deceived
Parliament and the nation when he answered a question on the RM1.8 billion
Tajudin-MAS sell-back scandal in Parliament on March 21, 2001, where he made
the following false claims:

that no
special considerations were given to Tajudin in the buying of MAS shares
from Naluri.

the
suggestion that the RM8 per share for Tajudin’s MAS stake was the best
price possible in the national interest, when he said that if the people
and MPs “are not happy with this purchase decision, the Government can
sell the shares back to Naluri”.

that Tajudin
was a “reluctant seller” at RM8 per share when the market price was
RM4.32.

giving the
impression that Tajudin was quite reasonable in wanting to release his MAS
stake to the government at not less than RM15 and that there was foreign
investor interest in MAS at this price - which was most outrageous as
Tajudin had told a foreign news agency when the deal was concluded that
he was lucky in getting a good price of RM8 a share to enable him to
settle Naluri’s entire debt of RM927.4 million, while the balance of
RM864.5 million would be for new business ventures but would in the
meantime be placed in banks to earn RM24.2 million a year.

Study is
being made as to whether the present Parliamentary Privileges Committee has
jurisdiction to deal with gross breach of parliamentary privileges committed
in the previous Parliament, as Daim was clearly guilty of in making
patently false statements intended to deceive Parliament and the nation.

In retrospect,
it is now clear why Daim had given such an unsatisfactory reply in
Parliament on the Tajudin-MAS sell-back scandal, in particular:

Why no
independent professional valuation was ever done when the government
agreed to pay Tajudin’s Naluri Bhd for the MAS stake at RM8 per share
representing a premium of RM4.32 or 117 per cent over the closing market
price at RM3.68 per share when the deal was signed on 20th December 2000;
and

Why rules
for the bail-out of companies established by the National Economic Action
Council in the “National Economic Recovery Plan” was violated and
Tajudin was not only spared from having to “take his appropriate
hair-cuts” but was given a bonanza at taxpayers’ expense to reward for his
mismanagement of MAS by being given 117% premium for the MAS shares
over the market price, transforming it into a personal rescue for Tajudin
instead of a public rescue for MAS.

Apart from the Tajudin-MAS
buy-out and sell-back scandals, the time has also come to “exorcise the
ghost” of the RM30 billion Bank Negara foreign exchange (forex) losses more
than a decade ago, especially as the person who played such a pivotal role
in the Bank Negara forex scandal is none other than Tan Sri Nor Mohamed
Yakcop, the second Finance Minister.

Up to now, the government has
failed to “come clean” on the colossal Bank Negara forex losses as a
result of speculation in the international currency markets from 1992-1994,
with the losses cited as ranging from RM10 billion to RM30 billion.

In Parliament in 1994, I had
given reasons as to why the Bank Negara’s forex losses as a result of its
forex speculation operations could have amounted to as high as RM30 billion,
which had not been seriously rebutted by any top government leader or Bank
Negara official.

One question which I raised in
Parliament on May 3, 1994 in my speech on the 1993 and 1994 Supplementary
Estimates had remained unanswered in the past decade and continues to haunt
the corridors of power – whether Bank Negara’s maximum exposure at the
height of its forward foreign exchange speculation was in the region of
RM270 billion, which was three times the country’s GDP and more than five
times the country’s foreign reserves at the time!

But it is not just the RM1.8
billion Tajuddin-MAS bailout and RM30 billion Bank Negara forex losses
where there must be proper accounting and discovery, the same applies to the
other mega financial scandals in the past two decades as well.